Back
12 Jun 2013
RBNZ next: Impact on NZD/USD
FXstreet.com (Barcelona) - The NZD/USD faces the RBNZ monetary policy decision in over 40 minutes at 21GMT having had a vigorous jump off cycle lows. The central bank will issue a new update on its macro outlook, with TDS strategists Greg Moore expecting it to remain steady, but that they will continue to try and talk down the NZD despite the 5% depreciation since May.
Despite the fall in NZD/USD, the Babypips team believes there still stands the chance that Wheeler will express concern about Kiwi strength, "mainly because of what's happening on AUD/NZD" the team says, arguing that "Australia is New Zealand's largest trading partner, so this has an impact on export demand."
Traders should note that the last policy decision was back in April, so chances are "we could be in for some wild action when Graeme Wheeler and the rest of the central bank whizkids step up to the plate" the Babypips article notes.
Back in April, Wheeler felt confident about the further recovery in the Kiwi economy, noting consumer were spending again, however, that said, the Babypips team has little doubt that "the RBNZ will keep rates steady at 2.50% and will once again express optimism about the local economy, it could also do some jawboning in an attempt to weaken the Kiwi."
Looking at the charts, if the level between 0.7850 and 0.7760 gives in, the pair may fall down to around .7450, Babypips notes, which would be a significant fall from current levels. "If they continue to jawbone and remark that the Kiwi is still overvalued, we could see NZD/USD break through support around .7850" Babypips added.
On the other hand, "should RBNZ Governor Wheeler makeno mention of the Kiwi's strength and expresses his optimism on the economy, we could see the Kiwi make a run for .8200" Babypips concludes.
As a final tip, traders should be reminded that the RBNZ statement has been hawkish 5 out of the last 6 times.
Despite the fall in NZD/USD, the Babypips team believes there still stands the chance that Wheeler will express concern about Kiwi strength, "mainly because of what's happening on AUD/NZD" the team says, arguing that "Australia is New Zealand's largest trading partner, so this has an impact on export demand."
Traders should note that the last policy decision was back in April, so chances are "we could be in for some wild action when Graeme Wheeler and the rest of the central bank whizkids step up to the plate" the Babypips article notes.
Back in April, Wheeler felt confident about the further recovery in the Kiwi economy, noting consumer were spending again, however, that said, the Babypips team has little doubt that "the RBNZ will keep rates steady at 2.50% and will once again express optimism about the local economy, it could also do some jawboning in an attempt to weaken the Kiwi."
Looking at the charts, if the level between 0.7850 and 0.7760 gives in, the pair may fall down to around .7450, Babypips notes, which would be a significant fall from current levels. "If they continue to jawbone and remark that the Kiwi is still overvalued, we could see NZD/USD break through support around .7850" Babypips added.
On the other hand, "should RBNZ Governor Wheeler makeno mention of the Kiwi's strength and expresses his optimism on the economy, we could see the Kiwi make a run for .8200" Babypips concludes.
As a final tip, traders should be reminded that the RBNZ statement has been hawkish 5 out of the last 6 times.